Sunday, June 9, 2013

Human beings love to go after something. Whether it is modern day hunters out in the forest, or young boys chasing girls or investors chasing the next growth area, we thrive in the thrill and rewards of actively pursuing something. To succeed in this investing style, one needs the ability to foresee the future based on the data available today. Real estate would be a good example for this one. An old family friend of my father once told us that Makati, the Philippines' financial capital, was once a swampland. Over the years, the price of land in this city has grown many times over and he has always expressed regret on not buying a piece of it way back when the price was cheap. We all have the benefit of hindsight but the majority of us will not invest in a swampland if we were in his place then. As an investor, you invest in the next growth area; before the majority of people get into the bandwagon and drive up the price. Identifying the "next big thing" requires one to be a keen observer and have an optimist's heart. Another example I would like to share is the mobile phone and the internet. Back in the 90's, they were exciting and new but few would have anticipated their explosion and even fewer would have invested in Globe Telecom or PLDT stocks that stood to profit from this. As always, I would like to caution investors not to get carried away with their predictions. For one, the future is always uncertain. There are also plenty of promising investments that turn out to be duds in the end. So let us be on the lookout for growth opportunities and if you see one, do let me know :) Happy investing!